At least six other Vinalines executives have also been arrested this year. All of them, including Mr Dung, are accused of causing losses to the company by purchasing old foreign ships that required expensive maintenance.

Vinalines also incurred losses over "irregular expenses" in its port projects, the government says.

Vinalines is one of a dozen of state conglomerates set up to be the driving force of the economy, reports the BBC's Nga Pham, but many are reeling under large amounts of debt.

The probe into Vinalines came after another state-owned company, Vietnam Shipbuilding Industry Group (Vinashin), ran up a debt of $4.5bn due to rapid expansion.

The government of Prime Minister Nguyen Tan Dung has long been criticised for mismanagement of state companies and slack anti-corruption efforts, so Mr Dung's arrest may help silence critics, showing that wrongdoers will be punished no matter what position they hold, our correspondent says.